Posts Tagged ‘Muhammad Yunus’

A guest post from Sam Daley-Harris, Founder of the Microcredit Summit Campaign, which seeks to reach 175 million poorest families with micro-loans, and of RESULTS, which seeks to create the political will to end poverty.

The deed is done. On May 5th, the appellate division of the Bangladesh Supreme Court agreed that the Bangladesh Bank, the nation’s central bank, was justified in firing Nobel Peace Prize Laureate Muhammad Yunus from his post as Managing Director of Grameen Bank, the institution he founded more than three decades ago. Prof. Yunus’s lead lawyer, Dr. Kamal Hossain, one of Bangladesh’s most distinguished attorneys and a drafter of the nation’s constitution, was scarcely able to hide his disgust at the Appellate Division order, when he said, “I [apparently] have to take admission to university again to newly learn the constitutional laws of the 21st century.”

The dismissal is not the lone action of one government institution, but is part of a premeditated campaign that starts at the highest level, with Prime Minister Sheikh Hasina. Their reason for sacking Prof. Yunus? He’s “too old.” Never mind that the 70-year-old Yunus maintains a rigorous schedule or that the Finance Minister, another key player in the sacking, is at 77 somehow not “too old” for that post.

The dismissal of Prof. Yunus from his post as Managing Director of Grameen Bank could portend ominous changes by the Bangladesh government.

Their excuse would be laughable if it were not for the calamitous impact it portends. What makes the decision to remove Prof. Yunus so disgraceful is not that he would be out of a job – any university in the world would welcome him with open arms as a visiting professor. No, the atrocity here is the fact that the independence and integrity of one of the world’s premier poverty-fighting institutions is now at grave risk. Grameen Bank, an extraordinary institution with more than 8 million microcredit borrowers that took 35 years to build, could be destroyed in a matter of months by incompetent government action.

The government’s action cannot honestly be in response to accusations by a Danish documentary maker about an improper transfer of Norwegian aid funds more than a dozen years ago, because both the Norwegian government and Bangladesh’s own review committee have found that Grameen Bank did nothing wrong. It cannot be due to the documentary maker’s charge of excessive interest rates, because Microfinance Transparency and the government’s own review committee found that Grameen Bank has the lowest interest rates in the country. Instead, most observers see this as an inexcusable political vendetta by the Prime Minister against Prof. Yunus, stemming from his short-lived attempt to start a political party in 2007.

Consider these groundbreaking innovations that Prof. Yunus’ poverty-fighting laboratory has brought to the world, and what could be lost in the future from his unwarranted ouster:

In 1976 he made loans of less than US$1 each to 42 desperately poor Bangladeshis to start or build tiny businesses – and the microcredit revolution was born. It has made its way all around the world. While others have seen microfinance as a way to make big money for investors, Prof. Yunus has never once diverted from his original intent to empower the poor.

Grameen Shakti, an energy firm, has installed more than a half-million solar home systems and sold more than a quarter-million improved cooking stoves.

In a joint venture with Danone, the yogurt maker headquartered in France, Grameen Danone is bringing low-cost fortified yogurt to malnourished children throughout the country – and creating a business opportunity for the poor women who sell it.

College scholarships and loans have gone to 180,000 students. Most remarkably, in almost all of the cases, these are the children of illiterate parents who have had the help of Grameen Bank in breaking the bonds of inter-generational illiteracy.

A government that so rashly and ruthlessly ousts this innovative and transformational leader cannot likely be trusted to continue his revolutionary work.

But the deed is done. Here is a sample of the visionary voice that Bangladesh has likely lost in this despicable government act. Reflecting on the 1997 Microcredit Summit, Prof. Yunus wrote: “In teaching economics I learned about money, and now as head of a bank I lend money. The success of our venture lies in how many crumpled bank bills our once starving members now have in their hands. But the microcredit movement, which is built around, and for, and with money, ironically, is at its heart, at its deepest root not about money at all. It is about helping each person to achieve his or her fullest potential. It is not about cash capital, it is about human capital. Money is merely a tool that unlocks human dreams and helps even the poorest and most unfortunate people on this planet achieve dignity, respect, and meaning in their lives.”

The ongoing saga of the confrontation between the Bangladesh government and its allies in the local media on the one hand, and Professor Yunus, the Grameen Bank and its 8.3 million borrower-owners on the other, has taken some surprising turns in the last 10 days. On April 20, representatives of Grameen Bank’s employee association held a well-attended press conference, covered by The Daily Star and other print and electronic media, where they presented the signatures of 20,103 colleagues who urged the government to either allow Prof. Yunus to remain as Managing Director or, failing that, to appoint him as Chairman of the Bank’s Board of Directors. This follows a similar effort by the borrower-owners of Grameen Bank, 3.7 million of whom signed hastily circulated petitions several weeks ago demanding that Prof. Yunus be allowed to remain as the bank’s chief executive.

Professor Muhammad Yunus listens to some of Grameen Bank's borrower-owners at a local Center meeting.

More recently, the so-called “Review Committee” appointed by the government to probe into the affairs of Grameen Bank and its sister organizations submitted its report – spanning more than 100 pages, according to some sources – to the Minister of Finance. While the report has not been officially released, portions of it have been leaked to government-aligned media outlets.

Soon after receiving the report, the Finance Minister commented on it to the press. His two principal messages, as covered by the AFP wire service, were that there was no improper diversion of Norwegian aid funds in the 1990s, as had been reported in the media, and that Grameen not only did not charge “excessive” interest rates, but that it in fact charges the lowest rate of interest among microfinance organizations in the country.

Neither of these “findings” were surprising to anyone who has been following this story closely and without bias, but it was noteworthy nonetheless that a government-sponsored commission publicly affirmed these facts. However, this did not stop hostile elements in the Bangladeshi media from seizing on the submission of the report to make new unfounded allegations against Professor Yunus. This has prompted Grameen Bank to issue a detailed “Response to the Various Issues Raised in the Review Committee Report as Reported in the Press“.

With the government-appointed committee finding that two often-repeated criticisms of Grameen Bank had no merit, hopes are rising that around the time of an upcoming Supreme Court ruling (expected May 5), Bangladesh’s judiciary or perhaps the leadership of the ruling party will put forward some kind of plan that will respond to the desires of Grameen Bank’s employees, clients and nine elected Board members to ensure the continued involvement of Prof. Yunus. That would be welcome news and enable everyone to briefly celebrate and then get back to the work at hand – reducing the grinding poverty that remains the daily reality for millions of families in Bangladesh and around the world.

Those interested in this issue might also want to listen to a special donor update that Alex conducted by conference call on March 23, 2011. In it, you’ll hear a brief summary by Alex of the situation, as well as an enlightening question-and-answer session where Alex gives his views on the causes of the government’s actions, possible scenarios going forward, what this means for the microfinance sector as a whole, and how changes at Grameen Bank could affect Grameen Foundation.

Barbara Weber, who worked at Grameen Foundation from 2002 to 2006, was a Rotary International Ambassadorial Scholar in Bangladesh and is now working on her Ph.D. in depth psychology.

Bangladesh went from being dubbed the world’s basket case in 1973 by former U.S. Secretary of State Henry Kissinger to becoming a beacon of development innovation that the rest of the world has since sought to emulate, thanks in large measure to its pioneering in microfinance. This renown is fast turning to infamy, however, as political vendetta cannibalizes the very source of the nation’s well-deserved pride.

The country’s acclaim reached a crescendo in 2006, when the Nobel Peace Prize was awarded to Grameen Bank and its founder, Professor Muhammad Yunus, for creating a system that has enabled the poor to pull themselves up by their boot straps. It has done this so effectively that its microfinance model has been studied exhaustively and replicated around the world.

What ensued next seems to have won Yunus the ire of the current prime minister, Sheikh Hasina. In 2007, the newly ordained Nobel laureate made a fleeting and ill-fated foray into politics in a vacuum that was created when a military-backed interim government began jailing operatives of the country’s top political parties. Sheikh Hasina herself was temporarily in exile and charged with masterminding crime.

Prof. Yunus and most of the Board directors who represent the borrower-owners of Grameen Bank tour the streets of Oslo the day before receiving the Nobel Peace Prize in 2006.

Some saw this as a potential turning point for a country that had topped Transparency International’s list of the most corrupt governments in the world. Bangladesh was number-one on that list for five consecutive years. But when national elections were held in 2008, Sheikh Hasina – who had held the post of prime minister from 1996 to 2001 – again took office. Now, she and her party in power seem intent on systematically dismantling Grameen Bank.

In apparent collusion with the current government, the country’s highest court recently upheld the ouster of Grameen Bank’s founder as managing director. The Supreme Court will have one more opportunity to review the case in a ruling that is due on May 2. In the meantime, Prof. Yunus remains managing director of the Bank while the world watches attentively and awaits Bangladesh’s next move.

My last day in the country was the beginning of the Bangladeshi weekend – Friday. That meant somewhat less traffic, a blessing to be sure. I spent three hours, starting at 10am, with my former research assistant, Abdul Mannan Talukdar. He is the first Area Manager in the history of Grameen who started as a loan officer (a position now called “center manager”). He is immensely proud of that, as he should be. An area manager oversees 8-10 branches, each of which are staffed by about seven staff (almost always including a university-educated branch manager) and serves several thousand clients. He told me about his journey, culminating in that historic promotion, dating from when I last saw him, in 2006.

I arrived at the Grameen Complex at 10:30am on Thursday, after having visited my old dentist (who does quality work for a fraction of the price charged back home). Before I began my first meeting, I noticed the almost frenetic activity around me in each office I entered. My good friend Mir Akhtar Hossain, who heads Dr. Yunus’ person staff, was so busy he could barely catch up with me – much less indulge in our traditional lunch of chicken biryani down the road in Mirpur One. Even after thirty-three years in existence, complacency has hardly taken root in the Grameen family of companies.

After a delicious Bengali breakfast of vegetables and paratha, I began a field trip that would ultimately bring me to Kholshi, where I did most of the research for my book Small Loans, Big Dreams. But first I asked to see a Grameen Bank center meeting, to see how the process has evolved. Abdul Malek, the manager, took me to Narandia, a village where there was a borrower meeting that day – this is where loan payments are made, new loans vetted, and other business conducted on a weekly basis.

Malek is still fairly new to this branch, and to driving a motorbike, so our trip through rice fields and the occasional dirt road was a bit of an adventure. I had visited Narandia a couple of times in the 1990s. Then as now the dominant force in this center – a federation of ten groups composed of fifty women clients – was Shaheeda Begum. She was making payments on her two current loans that totaled about $1,000. Only two other women in the center were able to borrow and invest amounts that large. To a much greater extent than was true a decade ago, loans are made on the basis of investment capability, and can vary a lot from client to client. Shaheeda was one of the most savvy businesswomen in the village. But as she would explain to me over the course of an hour, when she began borrowing from Grameen in 1987 her conditions were much humbler than today.

Royston and I spent the first few hours on Monday back in the Grameen Complex in Dhaka. The most exciting meeting was with two retired Grameen Bank officials — Fazley Rabbi and, briefly, Abser Kamal – both of whom now work with Grameen Shakti (Energy). Shakti, a sister company of Grameen Bank set up by Dr. Yunus in the early 1990s and that had been led until recently by Dipal Barua, has become a world leader in bringing renewable energy to rural households. We heard how they had passed 300,000 solar home systems installed, and how they do it profitably and at a rate of 13,000 per month at present. (The second most successful program of this kind has reached just over 100,000 installations.)

Alex Counts is President and CEO of Grameen Foundation, and the author of “Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World” (John Wiley & Sons, 2008). Below is Part Two of this journey to assess the state of microfinance with Grameen Foundation partners worldwide.

Muhammad Yunus and Alex Counts

After a gap of about two years, on December 13, 2009 I returned to Bangladesh – the birthplace of the modern microfinance movement and the country where I spent six of the first nine years after I graduated college. I came here initially driven by naïve idealism – that someone (especially at my tender age!) could catalyze the spread Grameen Bank’s approach beyond the borders of Bangladesh, so it could to become a global (rather than simply national) anti-poverty strategy. As I was to learn, even by the time I arrived in December 1988, that process was under way – a process that was much more complex than I had imagined, and one that has been the focus of Grameen Foundation since it was established in 1997.

Muhammad Yunus attended a reception in his honor, following his receipt of the Presidential Medal of Freedom and delivered a stirring speech about his 33 year fight against poverty and what he plans in for the future.

Today’s ceremony where President Barack Obama presented the Presidential Medal of Freedom to Professor Muhammad Yunus and 15 other incredibly accomplished citizens was a moment when any American, and any person, who wants the world to be a better place could feel proud. America’s highest civilian award was a well-deserved honor for Dr. Yunus based on more than three decades of accomplishment benefiting Bangladesh’s and the world’s poor, through championing microfinance and social business.

When President and Michelle Obama entered the room at 3:10pm, there was electricity unlike anything I had ever felt.